Blockchain is unlikely to play a significant role in cross-border remittances for “a very long time”, according to Commercial Bank of Dubai (CBD) CEO Dr Bernd Van Linder.
Speaking to Arabian Business, Van Linder said that, currently, he believes that cryptocurrencies are the only “real world” application of blockchain technology being implemented around the world.
“By real world, I mean an application that has surpassed the pilot stage. All the other [use cases] that I’ve been able to find are still pilots, whether it be cross-border remittances, KYC (know your customer) or legal contracts.
“Almost every bank in the world is a running a pilot using blockchain for those,” he added.
Van Linder noted that he does not believe that blockchain technology is a viable alternative to existing cross-border money transfer systems, such as Society for Worldwide Interbank Financial Telecommunication (SWIFT) transfers.
“I personally don’t think it [blockchain] will play a big role in remittances for a very long time to come,” he noted. “It’s not sufficiently scalable, and not sufficiently fast.
“We have an infrastructure with SWIFT that is working very well already in real-time, so that [blockchain] will take time, if ever,” he added.
However, Van Linder said that he does see the value of blockchain in other areas.
“The blockchain concept is very interesting, and I do see some great usage,” he said. “The main application will be in areas where there is shared documentation, whether it is in Know Your Customer [applications], or trade finance where there is a lot of documentation going back and forth.
“There the distributed ledger that guarantees the security of these documents will be very important,” he added.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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